Jointly Determining Production Quantity, Setup Cost Reduction, and process Reliability Improvement Decisions

摘要

This study examines a manufacturer's cost-minimizing problem of jointly determining production quantity, setup cost reduction, and process reliability improvement decisions, which are crucial in today's TQM and JIT practices. We develop an optimal solution approach based on the concept of marginal savings and marginal cost with difference equation. A numerical example illustrates an optimal convergence of the solution approach.